ScarJo v. Disney: The Unhappiest Contract on Earth
By: Adrienne Good
A pre-COVID agreement, the meaning of “theatrical release,” punitive damages, gamesmanship, forced arbitration, and one judge’s recusal. The Scarlett Johansson/Disney “Black Widow” controversy has entangled the media and is likely far from resolution. Here’s what we know so far:
Johansson Seeks Monetary and Punitive Damages from Disney
On July 29, 2021, Scarlett Johansson (“Johansson”) filed suit in California state court against The Walt Disney Company (“Disney”) alleging intentional interference with contractual relations and inducing breach of contract.[1] Johansson claims that Disney directed Marvel to violate its 2017 agreement to give “Black Widow” an exclusively theatrical release by simultaneously releasing the picture on its Disney+ streaming service.[2]
In May 2019, Marvel’s CEO reassured Johansson’s representatives that the picture would be given a wide theatrical release and 90 to 120 days of theatrical exclusivity like other Marvel/MCU films.[3] “As Ms. Johansson, Disney, Marvel, and most everyone else in Hollywood knows, a ‘theatrical release’ is a release that is exclusive to movie theatres.”[4] However, in late March 2021, Disney announced that “Black Widow” would be simultaneously released in theatres and on Disney+ Premier Access, a service available only to Disney+ subscribers that allows unlimited access to select films for an additional $30-per-film fee.[5] Through her representatives, Johansson then attempted to negotiate with Marvel regarding the parties’ prior assurances and understandings, but failed to reach a resolution — “Black Widow” was simultaneously released in theatres and on Disney+ in July 2021, grossing more than $60 million on Disney+ in its first weekend alone.[6]
Johansson asserts that Disney’s reasons for its interference were twofold: (1) an attempt to boost Disney’s stock prices by growing the Disney+ subscriber base, and (2) an effort to substantially devalue Johansson’s contractual agreement, thereby enriching itself.[7] Johansson also claims “that move took big chunks out of the film’s box office performance and her compensation, which included a cut of the film’s ‘box office receipts.’”[8] Additionally, Johansson cited a similar dispute where Warner Brothers allegedly settled with its talent on films such as “Wonder Woman 1984” after it released those films “day-and-date” to the HBO Max streaming service last year, noting that Disney and Marvel failed to take the same approach and essentially forced her to file this action.[9] Therefore, Johansson is seeking monetary and punitive damages, contending that “Disney acted with malice, oppression, or fraud, and in willful disregard” of Johansson’s rights and interests, and implying that Disney used COVID-19 as a pretext to do so.[10]
Disney Seeks to Compel Arbitration
On August 20, 2021, Disney responded with a motion seeking to compel arbitration and stay court proceedings.[11] Disney’s motion accuses Johansson of “gamesmanship,” arguing that her decision to sue Disney rather than Marvel is a “futile effort” to evade the “plain and expansive language” of the arbitration agreement.[12] Disney conceded that it is not a signatory to the “Black Widow” contract between Johansson and Marvel, which contains the arbitration provision;[13] however, it argues that Johansson is obligated to arbitrate the dispute because Johansson’s contractual claims against Disney “aris[e] out of, [are] in connection with, or relat[e] to” the “Black Widow” contract.[14] To support its argument, Disney relies on a 2005 California Court of Appeals ruling in Boucher v. Alliance Title Co. Inc.[15] There, the court held that “a signatory to [an] agreement containing an arbitration clause may be compelled to arbitrate its claims against a nonsignatory when the relevant causes of action rely on and presume the existence of the contract.”[16]
Further, Disney contends that the “Black Widow” agreement simply called for a “wide theatrical release” on “no less than 1,500 screens” and makes no mention of an exclusive theatrical release.[17] Disney maintains that not only did it release the picture on more than 30,000 screens worldwide, but it also provided Johansson with a cut of streaming revenue even though it was not contractually required to do so.[18] Moreover, Disney asserts that streaming the picture did not hurt its profits because, as of August 15th, “Black Widow” had grossed more than $367 million in world-wide box office receipts.[19]
In addition to the traditional media frenzy, an ethical dilemma arose resulting in Judge Robert S. Draper’s recusal after a minute order submitted to Johansson’s attorneys disclosed that Judge Draper received a monthly pension from O’Melveny & Myers LLP — Disney’s legal counsel — which may have given the appearance of bias in favor of Disney.[20] Subsequently, Johansson’s attorneys refused to waive disqualification and the court reassigned the case.[21] Stay tuned in October when newly-appointed Judge Elaine Lu is expected to decide on Disney’s compelled arbitration motion.[22]
Update: After Disney announced the simultaneous release, Johansson’s team reportedly attempted to negotiate an additional $80 million salary based on a hypothetical global box office take of $1.2 billion, bringing Johansson’s total “Black Widow” salary to $100 million.[23] Disney has not responded with a counteroffer.[24]
[1] Complaint at 1, Johansson v. Walt Disney Co., No. 21STCV27831 (filed July 29, 2021).
[2] Id. at ¶¶ 1, 5.
[3] Id. at ¶ 7.
[4] Id. at ¶ 1.
[5] Id. at ¶ 8.
[6] Id. at ¶¶ 8, 9.
[7] Id. at ¶ 2.
[8] See Craig Clough, Scarlett Johansson Sues Disney Over ‘Black Widow’ Release, Law360 (July 29, 2021, 5:15 PM EDT), https://www.law360.com/employment-authority/articles/1408023/scarlett-johansson-sues-disney-over-black-widow-release.
[9] Complaint, supra note 1, ¶ 2.
[10] Id. at 17, ¶ 62.
[11] Defendant’s Notice of Motion and Motion to Compel Arbitration and Stay Court Proceedings at 1, Johansson v. Walt Disney Co., No. 21STCV27831 (filed Aug. 20, 2021).
[12] Id. at 6.
[13] Id. at 15.
[14] Id. at 14.
[15] See Boucher v. Alliance Title Co. Inc., 127 Cal. App. 4th 262 (2005).
[16] Id. at 269.
[17] Motion, supra note 11, at 7.
[18] Id. at 9.
[19] Id. at 10.
[20] See Julius Young & Melissa Roberto, Judge in Disney Dispute with Scarlett Johansson Over ‘Black Widow’ Release Recused from Case Proceedings, Fox Business (Sept. 3, 2021), https://www.foxbusiness.com/lifestyle/disney-dispute-scarlett-johansson-black-widow-judge-recused.
[21] Id.
[22] Id.
[23] See Erich Schwartzel & Joe Flint, How Disney and Scarlett Johansson Reached the Point of No Return, Wall St. J. (Sept. 3, 2021, 1:06 PM EDT), https://www.wsj.com/articles/how-disney-and-scarlett-johansson-reached-the-point-of-no-return-11630688765.
[24] Id.
